Source: Pixabay/stux
Source: Pixabay/stux

The potential benefits to society of the transition to electric transport far outweigh the substantial costs, according to a new report by the International Council on Clean Transport (ICCT).

Based on an analysis of both Germany and the United States, where more than 200,000 electric vehicles were registered by the end of 2018 in the former and 1.2 million EVs registered in the latter, the report compares upfront costs and incentives prior against the long term cumulative benefits.

In the US for example, a federal tax incentive worth up to $US7,500 ($A10,979) is available for purchasers of electric vehicles, while Germany is subject to strict EU emissions regulations that punish car-makers for exceeding CO2 emissions targets.

This is in stark contract to Australia, where there is a lack of federal policy on the transition to electric vehicles, including an absence of fuel emissions regulations such as in Europe, is adding to customer costs and delaying the shift to EVs.

The report assessed the total costs of incentives to buy EVs, as well as consumer campaigns and the installation of electric vehicle charging infrastructure, and compared them to the savings, including fuel and maintenance, reduced prices of EVs, and the reduction of greenhouse gases.

The study put the costs in the US at $US5 billion ($A7.32 billion) per year and in Germany at €2 billion ($A3.26 billion) per year.

This was compared to the cumulative benefits reaching $US100 billion ($146 billion) in 2039 in the US and €20 billion ($A 32.55 billion) in Germany by 2044.

Costs, benefits, and policy over the transition to ZEVs in Germany. Source: ICCT
Costs, benefits, and policy over the transition to ZEVs in Germany. Source: ICCT

Money talks, but the numerous social benefits associated with those costs – such as improved air quality and reduction of related health problems by the public – also cannot be ignored.

Similar cost benefits have been noted in Australia, such as an Electric Vehicle Council report which found that billions could be saved in health costs if drivers in the wider Sydney region alone switched to EVs.

As the ICCT report notes, the highest costs are in the initial years of transition, and are typically implemented by governments, with a phase down approach as the costs of the transition are transferred to the private sector.

“Through the transition to a mainstream ZEV market, collaboration between the public and private industry actors will remain crucial,” the report says.

“Public-private partnerships through the transition from largely publicly-funded incentives, infrastructure, and consumer programs to profitable industry practices will identify gaps that governments, automakers, energy and infrastructure providers, and others can fill.”

The Australian federal government has some fledgling programs aimed at initiating a transition, such as ARENA backing for Evernergi to encourage fleet transitions or for Evie Networks to establish a nationwide charging network.

But its failure to implement fuel emissions regulations as well will cost Australians billions.

A recent study published by UQ researchers John Quiggin and Robin Smit instead shows that Australia’s fuel-related carbon emissions are increasing, in contrast to claims made by the Australian federal government.

Fuel emissions regulations have been one of the driving factors behind EV transition in countries like the US in Germany, while in Australia the lack thereof – and the subsequent health and societal costs – is costing Australians billions of fuel costs alone.

 

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